Is the state liable to pay interest on a claim for damages brought by a plaintiff against the state?

The rule in this respect was well stated in the early case of People ex rel. Bank of Monroe v. Canal Commissioners, 5 Denio, 401, as follows: The state, as such, is not liable to pay either principal or interest, as it cannot be sued by a citizen, and, of course, cannot be compelled to pay any debt. But where questions of public indebtedness come before the judicial tribunals through the agency of public officers over whom the court has jurisdiction, they do not hesitate to dispose of them upon the same legal and equitable principles which govern judicial decisions as between individuals. They apply the settled rules of law to such cases, and adjudicate upon the payment of both principal and interest in the same manner as in other cases. It is only in such cases that the judicial tribunals can direct the payment of a public debt, and there is no reason why, in directing such payment, the public agents should not be directed to do as ample justice as an individual would be required to do. Hence, if the question of the liability of the state to the payment of a claim for damages comes properly before a judicial tribunal, whether so brought by the public officer or the other [179 N.Y. 290]party, the tribunal, in adjudicating upon the question, will, if it determines the claim against the state to be just, in addition to directing its payment, also direct the payment of interest thereon, where it would in other cases direct such interest to be paid. * * * Indeed, there can be no reason why the state, refusing or unable to pay a just debt, should not pay interest thereon in the same manner as individuals.